FTC Exonerates Google in Search Bias Investigation

Yesterday, after an investigation lasting nearly two years, the Federal Trade Commission in the United States has concluded that Google’s search results are fair and unbiased.

In a statement that could have been written by Google’s own PR department, FTC director Jon Liebowitz said that Google is “one of America’s great companies” and that the changes the search engine makes to its algorithms are primarily to “improve the user experience.”

Google didn’t get away entirely scot-free from the FTC investigation and is being forced to make some small concessions with regards to its mobile patent portfolio (courtesy of its acquisition of Motorola Mobility) and the export of AdWords data.

But in the area of search bias, Google is completely exonerated.

Needless to say, Google welcomed this news with barely veiled glee: “…we’re pleased that the FTC and the other authorities that have looked at Google’s business practices […] have concluded that we should be free to combine direct answers with web results. So we head into 2013 excited about our ability to innovate for the benefit of users everywhere.”

Some of Google’s rivals are less enthused about the FTC’s findings. Microsoft especially is somewhat incensed: “Google often says that the antitrust offenses with which it has been charged cause no harm to consumers. Google is wrong about that. In this instance, for example, Google’s refusal deprives consumers who use competing platforms of a comparable experience in accessing content that is generally available on the Web, almost all of which is created by users rather than by Google itself.”

You can hardly blame Microsoft for feeling somewhat hard done by. In the 1990s the software company was nearly sued in to oblivion by the FTC for daring to bundle its Internet Explorer browser with its Windows operating system.

Microsoft’s defence at the time, that competing browsers were ‘just a download away’, is very similar to Google’s defence that rival services for travel, shopping, and flights are ‘just a click away’.

Yet Microsoft was forced to make extreme concessions to ward off the FTC’s antitrust concerns, whilst Google gets a pat on the back for ‘improving user experience’.

Commenting from a more neutral perspective Bloomberg’s editors seem to agree that Google got off too lightly, saying that the FTC “missed an opportunity to explore publicly one of the paramount questions of our day: Is Google abusing its role as gatekeeper to the digital economy?”

There’s no doubt that Google’s search dominance, especially in Europe, is harming businesses.

Here’s an example. Say you’ve started up a flight comparison site in the early 2000s, and you’ve worked hard to get airlines and travel companies on board so you can offer the best flight deals to your site’s users.

But, through developments that are entirely outside of your control, your business becomes increasingly untenable over the years. First users decide to start using Google almost exclusively to find stuff online, forcing you to maximise your visibility on the search engine.

Then Google decides to launch a rival flight comparison service straight on its SERPs. Even though you offer better deals, your traffic begins to dry up as Google takes the bulk of flight searches off your hands.

Because your user figures go down, you can’t negotiate competitive deals any more with airlines and travel companies, which has a negative impact on the quality of your flight comparison service, which in turn sends more users to Google’s service. You can see where this is going.

Bloomberg’s editorial sums it up nicely: “Ask yourself this simple question: Am I harmed when rival services, whether for product comparisons, hotel bookings, airfares, restaurant reviews or maps, go out of business because they can’t compete with Google? We suspect the answer is yes.”

The European Commission is set to deliver its own judgment later this month, and there are some signs that they will be less forgiving of Google’s practices. Here’s to hoping.

12 thoughts on “FTC Exonerates Google in Search Bias Investigation”

The question of in-house competitive advantage is indeed a complex issue. Is it philosophically right to abuse your dominant position in one market to leverage your performance in another? The answer to this clearly depends on which side of the company you stand on.

What competition authorities are concerned about is whether this change in market structure has the likelihood to reduce the welfare of consumers now, or in the future. Google is a user-focused brand, and in the world where, as Chris Anderson puts it, atom economies are moving to bit economies, and products move closer and closer towards becoming free, the old concern of pricing monopoly no longer stands true. This is game changing!

This then brings up the next concern of information monopoly, and the issue of being the gatekeeper to the digital economy. That topic warrants a blog response-I don’t think I have the mental power for that now…

Does anyone really care how this affects Microsoft apart from Microsoft? They are historically the most anticompetitive digital firm out there, and have never shown remorse for their competitive tactics. So how can they have the audacity to complain, when it is, in fact, Google’s long-term strategy and vision, their culture, the strength in their products, and their user-base which define their competitive success – not just their competitive tactics.

In respect to your example of the Flight comparison site, isn’t this a fake economy anyway? An idea that has squeezed in between flight companies and the consumer. I agree it serves a useful purpose, but people will find this site through Google anyway, so will it not end up saving the searcher the effort of an extra click?

Google’s users are their product – not their audience. What people need to realize is they have the ultimate advantage and that IS the plan. You can either stay on the wide path that leads where they want you to go OR leave the fake economy altogether and return to self-sufficient local economies.

Those of us who don’t plan to let Google dictate what we think, see, and do know that it makes not one iota of difference whether it is Microsoft, Apple, Google, or any other multi-national corporation. Either you believe whatever they do is wonderful or you realize it is time to reclaim a separate reality.

It appears that this will only affect the display of content in the SERPs for certain verticals (Shopping, Google+ Local, Flights, Hotels and Advisor Pages) and will have no impact on indexation or ranking signals.

It will certainly be interesting to see what action companies like Yelp and online yellow pages take. And of course will European regulators take a tougher line?

Ya that’s really true Laurie. It will not affect results on any of Google’s verticals and even for results on the main search for the keywords related to shopping, they just want their advertisers to generate more revenue or get the most benefit and hence have a “Shop for on Google” link appears on its results if it is relevant for a keyword searched from a particular location.

The question should be quite simple but obviously the majority of decision makers just don’t get it or are afraid Google’s got too much data on them (based upon their own browsing habits?) to risk going against Google.

This is what always happens: people scream, investigations are launched, they drag on for years, and then the guilty are “exonerated”. We can’t be surprised when they got that piddly $25,000 hand slap. Google is the system of the beast. I know some don’t believe in such things, but I’m telling you right now – Google IS the system and those who control the media and publicly traded corporations control everything so there is no stopping where this train is headed. I encourage people to stop focusing so much time on Google and create another path because you are ants to them.

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